CALAUAN, Laguna— President Arroyo on Thursday signed into law here a measure that would condone 100 percent of the penalties imposed by the Social Security System (SSS) against employers for their unpaid contributions.

In a simple ceremony at theSouthville 7 Housing Project Site 1 in Barangay Dayap in this town, Mrs. Arroyo signed Republic Act 9903 or the SSS Condonation Law that would give a one-time authority to SSS to fully condone the penalties slapped on unpaid employers' remittances.

The law is a consolidation of House Bill No. 5922 and Senate Bill No. 2454 passed by Congress on October 9.

The President signed the law shortly after she led the turnover of the deed of donation and acceptance for 37 school buildings constructed for Southville and Northville relocation sites between the National Housing Authority (NHA) and the Department of Education (DepEd).

Mrs. Arroyo said with the signing of the Act, the government seeks to collect P5 billion in unremitted principals from small and medium enterprises that have incurred penalties due to their failure to remit employers’ contributions to the private sector pension fund.

In an interview, SSS president Romulo Neri said they expect to receive accumulated penalties amounting to P280 billion and P109 billion from principal contributions.

He said the measure would signal the dropping of court cases against delinquent employers who failed to remit contributions to the SSS.

“We can collect delinquency contributions with this condonation. We hope to collect more delinquent contributions,” said SSS vice president Judy See.

The Senate version of the law noted that there are about 164,111 delinquent employers.

Under the law, delinquent employers are mandated to remit their overdue contributions and submit proposals to pay the balance in installments within six months from the effectivity of the Act.

Those who prefer to pay in installment may remit not less than five percent of its total delinquency contribution and the rest will be paid within a period of 48 months at an annual interest of 3 percent.

Quezon Rep. Lorenzo Tanada III, one of the proponents of the Act, said he is happy with the enactment although it came after two years of hearings and discussions in Congress.

“Though late, the bill is still a very welcome Christmas present particularly to small and medium businesses," the lawmaker said.

“Especially in the light of the calamities of 2009 and the ongoing economic recession, it is important that the benefits of SSS members such as the loan packages be made available,” he said. The law will help the SSS, the employers and workers, Tanada added.

Meanwhile, Neri said the SSS will issue two million Unified Multi-Purpose ID System (UMID) cards to members starting this March. The unified ID will be used by three other government agencies for their members’ transactions.

The Government Service Insurance System (GSIS), Philhealth and the Home Mutual Development Fund, known as the Pag-ibig Fund, have previously agreed to use the UMID as the uniform government ID for their transactions.

A joint venture composed of Stradcom, All Card and Taiwanese card manufacturer Teco, which submitted the lowest bid of P1.69 billion, won the bid to implement the project.

The card would cost the agencies P140 each. (With a report from Gabriel S. Mabutas)